Economy

John Kenel: Rising Rents – Government Guaranteed

Rents rose 7% in Hamilton last year and we’ll likely see the same again in 2019.

Now that Kiwibuild is a confirmed failure, Twyford is trying something new. The government’s solution to nightmare council processes is to introduce more State Control via a new mega-bureaucracy called the Housing and Urban Development Authority (UDA], which will have the power to cut through red tape. But wait, not for all builders and developers, only for themselves, the UDA.

Instead of fixing the problem all builders and developers face, of long and expensive consenting processes, exorbitant development contributions ($99,000 per section in some parts of Hamilton) and lack of council infrastructure to name a few of things slowing down development and driving up cost. Phil will have the power to build whatever he wants, wherever he wants.

Lookout for hideous socialist housing estates in your town soon as Kiwibuild is pushed aside and Taxcinda starts her state housing building program…

The upside for existing rental property owners is that many builders will be drawn to the seemingly lucrative government building contracts, meaning less (desirable) rental property will be built. Demand will strengthen and Rents for good quality rental property will continue to rise.

You can’t fix the housing shortage by making bigger bureaucracies, it’s only possible through more supply, and that won’t happen anytime soon.

Government policy will extend the housing shortage and drive up rents.